Category Archives: debt

Q1 2016 Financial Report

I haven’t really given any financial updates in a while, so I figure now’s a good time!

First, I met my goal for 2015 of paying off my highest interest student loan! I was super stoked!

As much as I want to build on that momentum, 2016 is not being focused on student loans. I have two major items/events that my money is going to. I’m getting married in October, and I also desperately need a new vehicle. My goal is to not go into any debt for either of these items.

My fiance and I are paying for our wedding ourselves and splitting the costs 50/50. We’re looking to keep it under $8,000 total. Maybe $10,000 with the honeymoon, but the lower the better, obviously.

As far as a car goes, I’ve been complaining about my truck for years. I don’t need a brand new car but I do need something that’s more comfortable and roomy. I cannot keep going through Idaho summers without air conditioning. I’m looking to buy something used but with pretty low mileage in the  $6,000-$8,000 range.

After I paid off my student loan, my savings dipped below the $1,000 I always try to keep in there. Luckily, the first 3 months of 2016 have been financially awesome. I was able to put aside my entire tax return, and I was finally able to reimburse myself from my HSA for my wisdom tooth surgery last year. I also had a couple side gigs that brought in a few hundred dollars. Thus, I now have $3,000 in my savings and my checking account is in no danger of me needing to draw from savings.

So far I’ve spent about $1,000 on wedding planning, about a 4th of what I’ll need to spend total. with $3,000 more for wedding and at least $6,0000 needed for a car, I’m looking at needing to save $9,000.

I’ve been consistently able to save about 500 a month from my regular income. with 9 months left in the year, that’s about $4500, or half of my goal! However, with the weather heating up, I’d really like to buy a car in the next couple months. And the wedding is in October, meaning about 1500 of that $4500 won’t really count toward this year’s goals. (But that will be put to good use toward my student loans, which is still a priority. I’m just not putting my life on hold to pay off college.)

Luckily, I have a couple opportunities coming up to earn some extra money, so I’m hoping I can really maximize my income. More on that when it works out.

I could also do a little better on the frugal living front, but I’ve managed to keep my spending in check. Without really noticing, we’ve cut our eating out to about once or twice a month. We’re at a point where we genuinely prefer my homemade pizza enough that it’s worth the extra time and effort to make it rather than order subpar fast-food pizza, which is nice for our wallets and our bodies.

Overall, 2016 is looking great! I’m in a better financial spot than I’ve ever been, and I still have hopes for paying off my student loans before I’m 30, even though that’s not really my focus this year.

 

 

Student loan payoff plan 2015

I’ve said many times that my goal this year is to pay off my highest interest student loan, which has a balance of a little over $6,000 at this point. I didn’t make any plan as to how much I would pay at a time, so that I would just pay it off as quickly as possible.

The problem is that I haven’t put any extra money (besides my monthly payments, which are $100 above the minimum) toward that loan at all so far this year. There are two reasons for this: Read the rest of this entry

Spending Freeze Diary

Today is April 4th. On April 1st, I decided to start a 2 week spending freeze. I am not going to spend any money until April 15th.

Of course, that previous sentence is completely ridiculous. I’m going to spend money in this next two weeks. But I’m cutting all miscellaneous spending. That means that money will be spent on the following items only:

  • Bills
  • Necessary groceries
  • Gas

Read the rest of this entry

January Progress

money goalsJanuary’s almost over, and most New Year’s Resolutions have been forgotten.  I didn’t really have any specific “New Year’s” resolutions, but I did find myself finding a lot of great things I wanted to accomplish this year, right around the last week of last year. I found an awesome yoga challenge. I found a really cool reading challenge. I made too many grand plans to have time for.

But my main goal this year is to pay off my highest interest student loan. That is a tangible goal that is really easy to track. I’d like to pay it off earlier in the year rather than later, but in order to meet my goal, that loan just needs to be at a zero balance by December 31, 2015. Read the rest of this entry

My Savings Plan

I just filed my income taxes and finding out how much I spent on student loan interest was a rude awakening. I am more determined than ever to clear up my debt, and a lot of that will come from saving money that I would otherwise spend. Here are the ways I am going to focus on saving this year:

52-week-money-saving-challenge

1. The 52-week saving plan. Basically each week you save a dollar more than you did the last week and end up with over $1300 at the end of the year.  I am tailoring this to my own needs by transferring the money directly from my checking to my savings each week so that it’s nice and tucked away. I have debated whether I would change it more, since I don’t like the idea of putting away $200 in December, but I think I’m going to suck it up and make it work.

2. I’m putting my entire tax refund toward loans. I need to determine whether I want to make a big payment now to get the principle down or wait until the end of the year so it’s an even bigger payment. I might do it now, just to save on the interest even more. This year I will keep track of all charitable donations so that I can get a deduction next year (though it won’t be huge, every bit helps).

3. I’m going to save on groceries by using tactics like growing vegetables from scraps. I’m also going to make my own vegetable stock from scraps, like potato skins, leftover herbs, and vegetable ends.

4. Any time I get extra money (specifically cash) it’s going into savings. I’m even going a step further and treating money people pay me back (like if I bought them drinks, or mailed a package for my mom) as extra money. This is a small way to put money into savings that I wouldn’t otherwise.

5. I already have $25 a month automatically going to savings. That is continuing in addition to all my other saving tactics.

6. Every time I make an extraneous purchase (eating out, going bowling or to the movies, other entertainment), I’m going to put the equivalent to what I spend in savings. I saw this tactic in an article I read recently, and wasn’t sure if I wanted to adopt it because it seems a bit extreme and will take a lot of discipline. But I know it will make me look at my expenses closely and keep me from living beyond my means.

At the end of the year, all the extra I’ve saved will be directly applied to my student loans. This week I am also going to look into raising the monthly payments on the loans with the highest interest so that I’m paying down the amount faster. I will then work that higher payment into my monthly budget so that I can still pay my other bills.

Writing this up, it looks a bit over-the-top, like my life is going to be focused on money. But I see it more like my life is going to be focused on not spending money needlessly. I will find other ways to entertain myself- reading, crafting, and other things I enjoy. This will give me the leeway to spend money on things I really want to when they come around like traveling to visit friends, and the occasional concert.

What are your strategies to save money/get out of debt? Share in the comments!

 

 

My Debt

Last week I talked about my resolve to pay off my student loans as quickly as possible. I don’t want to be paying over $800 a month for the next 14 years just to pay off my education. I want to be able to save money and travel and that’s just not very realistic with all that money coming out. Luckily, if I pay it off in bigger chunks, I’ll save a lot of money on interest. But before I get into that, I want to go into how I got into debt in the first place.

I’ve never had credit cards. I’ve never overdrawn a bank account. All my debt is student loans (with the exception of a line of credit for car repairs that I’m on track to pay off before interest kicks in).

I went to a small private school in Portland, Oregon. I’m from Idaho, so there was no in-state tuition, but that wouldn’t have applied since the school was private. I graduated four years and had the time of my life. I loved the small classes, the professors who kept me accountable, and the relatively small student body. I chose private school because I didn’t want to fall through the cracks.

From a financial standpoint, it’s smarter to go to an in-state public school. If there is one that has the program you want, I would recommend forcing yourself to have the self-control to keep yourself accountable and not fall through the cracks.

That being said, there’s more to life than money. I don’t know if I would have graduated if I’d gone to a large school, and then any money I had spent, though significantly less, would have been wasted. I also loved going away from home, and having experiences I never would have had otherwise.

So, if you’re set on a small school, or an out-of-state school because you think you’ll enjoy it more, go for it. Just be smart about your finances. I got some scholarships, but mostly just the ones I qualified automatically for. I kept procrastinating on external scholarships until the deadlines were past.

I also didn’t pay off any of the interest that accumulated while I was in school. This is a couple thousand that is now gaining interest, that I could have paid off while still in school. If I had been making payments while in school, I would have had more of a mind about my finances and probably would have saved a lot more.

The main point of all this is that going into debt is easy. And getting out takes a lot of time and effort. So even if you don’t have to make payments for a while, make them anyway. Think about the payments you’ll have to make in the future. Yes, go out and have fun. I wouldn’t trade my college experience for the world. But I still would have loved it if I had eaten out a couple fewer times a month, and been more financially conscious.

So, that’s my debt story. The next post will focus on what I’m currently doing to leverage my current income and save money to pay off my student loans

Resolve

I didn’t make New Year’s Resolutions this year. I’m tired of making goals and then ignoring their existence. New Year’s Resolutions have come to be a pointless activity that almost encourages you to make goals and then break them.

There are a couple of things I’ve decided to dedicate myself to though, and the decision did happen to line up quite nicely with the start of 2014.

Due to the projects I’ve been working on at work, I’ve read a lot about getting out of debt. I’ve read a lot of stories about people who had massive amounts of debt, but managed to get out of it well ahead of schedule. Their strategies are simple, a combination of living frugally to save money, and increasing their income.

While these stories that I’ve found, like Man vs. Debt and Frugal Confessions helped inspire me to really focus on paying off my student loans, they only have so much actionable advice I can follow. This is partially because everyone’s financial situation is different and partially because of the assumptions that a lot of “get out of debt” articles and sites make. Assumptions like:

1. You’re in debt because you have bad spending habits.

2. You have a million things you could cut back on.

3. You have things to sell

My next few posts will be dedicated to outlining my game plan to pay off my student loans as soon as possible. I was going to put it all in this post, but I wrote a lot and it was scattered and teetering on 2000 words before I was even close to done. So I’ve broken it up into the following sections which should be easier to digest:

1. My Debt – All of my debt is student loans, but I could have decreased it by having better financial foresight in college. I’ll go into that a bit.

2. My Savings Plan – A huge part of paying off debt (or even just saving money) is utilizing the funds you already have. I am a huge fan of cutting back on extra costs, but a lot of the advice to do so is either vague or not applicable to me because I don’t have a lot of extras. This post will outline my savings plans for this year.

3. Increasing My Income – I can only do so much with the money I currently make. So this post will focus on my ideas for increasing my income. This will be interesting, because so far in this category, I have a lot of ideas, but no solid plan.

So that will be the beginning of my “get out of debt” story. I’m not going to fully dedicate this blog to this subject, but I will be posting updates along the way, as well as money-saving and earning ideas I come across. And knowing how my life influences my writing, I’m sure a character in at least one story or sketch I post will be struggling with debt.